Disruption caused by a £1 million renovation of The Grand in Brighton was brushed off by its owners who issued an optimistic trading update.

Leisure group De Vere forecast a three per cent rise in annual revenues despite the makeover of its flagship hotel, the poor weather and the impact of Euro 2004.

The group, which also owns The Belfry golf complex in Warwickshire, said the performance offered encouragement after signs of a recovery emerged in March.

With conference bookings holding up, De Vere said turnover at its 21-strong hotels division during the 12 months to Sunday was expected to be 3.5 per cent higher than a year ago.

However, the group warned its failure to land the Premier Lodge chain of budget hotels cost £1.3 million in exceptional costs. De Vere dropped out of the auction amid concerns over the cost of the acquisition, which was eventually completed by rival Whitbread for £505 million.

The £1.3 million includes fees racked up by De Vere in its defence against rebel shareholder GPG Holdings, which earlier this year led a campaign to force the sale of its UK hotels.

GPG announced in March it was offering £118 million to add 25 per cent of shares to its current ten per cent stake but failed to persuade shareholders to back its bid.

In addition to its portfolio of hotels, De Vere operates 15 Greens health and fitness clubs, 14 Village leisure clubs and distillers G&J Greenall.

De Vere said a cross-media marketing campaign had counteracted the impact of recent wet weather on its hotels division and drove like-for-like revenues per available room ahead by 2.5 per cent.

Occupancy also improved in spite of the impact of Euro 2004 and disruption caused by a makeover of The Grand ahead of its 140th birthday in July.

De Vere spent £1 million restoring the facade of the hotel to its original 1860s style.

It was only the third facelift in the hotel's history.

In May, The Grand said goodbye to its general manager of 20 years, Richard Baker, who had guided the hotel through the 1984 bombing and was the driving force behind the opening of the conference suite.

He was replaced by 40-year-old Andrew Coggings who managed Brown's London before taking over the reigns at De Vere Slaley Hall in Northumbria.